Question

Tanner and Teresa share income and losses in a 2:1 ratio after allowing for salaries of $45,900 to Tanner and $71,100 to Teresa. Net income of the partnership is $137,700. Income should be divided as follows: a.Tanner, $59,700; Teresa, $78,000 b.Tanner, $83,000; Teresa, $54,700 c.Tanner, $55,700; Teresa, $82,000 d.Tanner, $54,700; Teresa, $83,000

Answer 1

Answer:

Tanner, $59,700; Teresa, $77,400

Explanation:

Net income of the partnership    $137,700

Salary to Tanner                           $45,900

Salary to Teresa                            $71,100

Profit of the partnership             $20,700

Tanner and Teresa share income and losses in a 2:1 ratio

Profit Distribution

Tanner = $20,700 * 2/3 = $13,800

Teresa = $20,700 * 1/3 =  $6,300

Income of Tanner = $45,900 + $13,800= $59,700

Income of Teresa = $71,100 + $6,300= $77,400

Tanner, $59,700; Teresa, $77,400